Rates Aren’t Too Low

There is a standoff between workers and employers on a number of fronts. One of them is going back to work in the office versus working from home. That battle will occur this summer. Workers want to stay home and employers want them to come in. The most likely compromise is a flexible schedule where employees work from home once or twice per week.

Now let’s look at the data by industry. As you can see from the chart below, the arts, entertainment, & recreation job openings rate increased from 10.3% to 11.6%. Nominally, that’s an increase from 206,000 to 248,000. Accommodation and food services openings spiked from 989,000 to 1.338 million. Hiring didn’t increase by as much, especially in the former industry.

Arts, entertainment, and recreation hires only rose 20,000 to 177,000. Hiring should spike in the next few months as travel and recreation spending increase. Maybe the openings weren’t filled because it takes time to hire people. After all, there was massive dislocation in the labor market. Accommodation and food services hires were up from 1.015 million to 1.247 million. With dining out fully recovering, these jobs should all come back this summer.

Rates Aren’t Too Low

The 10-year yield is much lower than it would normally be in this type of inflationary environment because it is transparently temporary. Not only are the supply chain and pent-up demand situations temporary, but also everyone knows it. You have to know what everyone else knows to figure out what is priced into the market. In this case, the market is looking at inflation peaking over the next few months. The inflation surprise index has been declining. That is correlated with the rate of change of inflation.

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Disclaimer: The content in this article is for general informational and entertainment purposes only and should not be construed as financial advice. You agree that any decision you make will be ...

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